Published 4:00 am, Wednesday, August 2, 2006

2006-08-02 04:00:00 PDT Washington -- Californians mobilized Tuesday to oppose a new federal minimum wage law coming up for a Senate vote this week that they say would slash the pay of an estimated 650,000 California waiters, waitresses, manicurists, bellhops and others who rely on tips for a chunk of their income.

But advocates of the proposal say the critics are misreading the legislation's arcane wording. The proposal is part of a voluminous House-passed bill that would cut estate taxes on the wealthiest Americans and offer a long list of other tax cuts, in addition to raising the minimum wage.

The bill would for the first time in nine years raise the federal minimum wage for 7 million workers from the current $5.15 an hour to $7.25 over three years.

The disagreement comes over the bill's wording for the seven states, including California, that do not allow so-called tip credits that permit tipped workers to be paid much less than the minimum wage.

Democratic critics, including Sen. Dianne Feinstein of California, contend that in this state, which has its own, higher minimum wage of $6.75 an hour, the pay of some 650,000 people who rely on tips would be hacked from the state minimum wage of $6.75 plus tips to $2.13 an hour plus tips.

In San Francisco, the cut would be even steeper, from the city minimum wage of $8.82 an hour plus tips to $2.13 an hour plus tips.

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"This is unacceptable," Feinstein said in announcing her opposition to the package that Senate Majority Leader Bill Frist of Tennessee wants to bring to a vote by Friday, before the Senate goes on its August recess.

"This bill would slash the salaries of thousands of workers. I strongly oppose it, and I urge my colleagues to do the same," she said.

Sen. Barbara Boxer, D-Calif., said she is planning amendments to the proposed bill. "Only this Republican Congress could figure out how to turn a minimum wage increase into a pay cut for hundreds of thousands of Americans, including thousands of Californians," she said.

The wage provision also represents the most recent effort in which California's laws have been threatened by congressional attempts to pre-empt states in favor of national standards in matters such as food labeling and financial privacy.

"I can't square the conservative argument for state's rights and local control and then consistently we're seeing over and over Congress trying to pre-empt California law," San Francisco Mayor Gavin Newsom said Tuesday in a telephone interview.

The city's Board of Supervisors approved an emergency resolution Tuesday decrying any effort to cut the pay of any minimum wage workers in the city.

The provision's supporters say it wouldn't cut the current pay of anyone. Instead, they say, the wording deals with future increases in no-tip credit states such as California or in localities such as San Francisco with their own, higher minimum wages.

If the state or the city raises its minimum wage, the difference between today's minimum wage and the new, higher rate would be a tip credit -- meaning that tipped workers wouldn't get the money called for in the wage increase, said supporters of the bill.

The Legislature and Gov. Arnold Schwarzenegger are considering a higher state minimum wage, and San Francisco's minimum wage is indexed and rises with inflation.

"We wouldn't be part of any effort to cut anyone's wages," said Brendan Flanagan, the National Restaurant Association's vice president for federal relations. "This legislation creates a prospective tip credit for future wage increases."

Disagreements over the meaning of legislative wording are hardly unusual. In this case, opponents of the wage provision could try to offer an amendment to strip out the language or change it. However, Frist has indicated he will try to limit the scope of amendments to the bill passed by the House early Saturday before it left on its long August recess.

Frist said the bill has to walk a line between Republicans, many of whom have long opposed any increase in the federal minimum wage, and Democrats who have sought such a wage increase. By combining the provisions, Frist said, he hopes to get the 60 votes needed to cut off Senate debate and move to passage of the bill.

"It's in the great spirit of togetherness in this great body," Frist said on the Senate floor.

Sen. Harry Reid, D-Nev., the Senate minority leader, wasn't buying Frist's talk of bipartisanship. Referring to the tip credit provision, he said, "If this passes, it would be a disservice to hard-working people in Nevada, California and five other states."

He said the Republicans aren't really interested in passing the minimum wage increase, which polls show has overwhelming public support, but are concerned only with paring the estate tax for the wealthy.

"We've spent more time on the estate tax than anything else. It shows the difference between the two parties. ... We're concerned about the very poor, and they're concerned about the very rich," Reid said.

Frist said the estate tax "is wrong. It's unfair" because it forces owners of farms and family businesses to sell in order to pay estate taxes.